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India Courts Intel Chip Fabs With Hefty Incentives

Intel CEO Pat Gelsinger
(Image credit: Intel )

When it comes to government subsidies for chipmakers, it's no secret that Intel CEO Pat Gelsinger is "all-in." Gelsinger has been very vocal about putting Intel back in a global leadership role and is pushing Congress to approve $52 billion in subsidies to bolster domestic chip production. Knowing Gelsinger's position on subsidies, India is heavily courting Intel to open fabs in the country, reports Mint.

According to a tweet from Ashwini Vaishnaw, India's Minister for Electronics & Information Technology, Intel might have already accepted the country's financially-motivated invitation. Vaishnaw posted a simple tweet, stating, "Intel – welcome to India." In a bid to position India as a burgeoning hub for chip production, the Union Cabinet approved a ₹76,000 crore ($10 billion) incentive package to lure semiconductor and display manufacturers.

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One critical aspect of India's proposed incentives is a Design Linked Incentive that would offer a 50 percent credit for eligible expenses. In addition, "the Scheme for setting up of compound semiconductors / silicon photonics / sensors fabs and Semiconductor ATMP / OSAT facilities in India shall extend fiscal support of 30 percent of capital expenditure, to approved units," said India's Ministry of Electronics and IT in a statement.

"Support will be provided to 100 domestic companies of semiconductor design for Integrated Circuits, Chipsets, System on Chips [and] semiconductor linked design, and facilitating the growth of not less than 20 such companies which can achieve turnover of more than ₹1,500 crores in the coming five years." 

Despite a deal that seems too good to pass up, the U.S. chipmaker isn't ready to confirm anything just yet. "Intel India is Intel's largest design center outside of the U.S., and we have been investing towards accelerating innovation and design engineering in India over the last two decades," said an Intel spokesperson to Business Today. "However, we have no new plans to announce at this time."

Intel might have assured the Indian government that it would build fabs within the country, and cabinet officials jumped the gun with the public tweets, or this could be India's way of calling Intel's attention to the country. If the former is indeed the case, we'll likely hear official confirmation from Intel during the new year, perhaps at CES 2022. Speaking of CES 2022, Intel announced last week that it would significantly reduce its footprint at the trade show in favor of virtual events in the wake of rising cases of the Omicron variant of COVID-19.

Interestingly, Gelsinger's pleas to the U.S. government for the $52-billion CHIPS Act emphasized offering incentives only to American chipmakers (citing massive incentives by the governments of China, South Korea and Taiwan to domestic chipmakers). However, Intel doesn't seem to adhere to the same restriction when taking incentives from foreign governments. "How do you compete with a 30 to 40 percent subsidy," said Gelsinger earlier this month. "Because that means we are not competing with TSMC or Samsung, we are competing with Taiwan and Korea. The subsidies in China are even more significant."

Brandon Hill is a senior editor at Tom's Hardware. He has written about PC and Mac tech since the late 1990s with bylines at AnandTech, DailyTech, and Hot Hardware. When he is not consuming copious amounts of tech news, he can be found enjoying the NC mountains or the beach with his wife and two sons.